Berry Plastics to Hit the IPO Road

Berry Plastics Group Inc. could launch its initial public offering road show as soon as this week, according to people familiar with its plans.

The maker of plastic containers for retail items ranging from food to pills is seeking to raise $500 million, and is aiming for a valuation of around $2 billion, these people said. It was acquired by Apollo Global Management LLC and Graham Partners Inc. in 2006, in a $2.25 billion deal. It initially filed to do an IPO back in March.

The deal would be another in a string of IPOs by private-equity owned companies coming to market, including Spirit Realty Capital Inc., a commercial property real estate investment firm, and Domus Holdings Inc., the parent of Realogy, which owns realtor brands such as Century 21.

Spirit’s IPO is expected to price this week, while Domus is said to be close to launching its own road show in the coming weeks, said people familiar with the matter. Domus is also an Apollo portfolio company.

A string of such deals is a sign of rising hopes for the end-of-year IPO market. IPOs of leveraged industrial companies tied closely to the broader economy were common in the first half of the year, when companies such as Allison Transmission Inc., a maker of vehicle engines, and Rexnord Corp., which makes industrial components, launched IPOs.

Their performances since their IPOs have been mixed. Allison’s shares, which priced within their projected range back in May, have fallen 16% since its IPO, while Rexnord, which priced at the bottom of its range, is up 4% from its March offering.

Berry said in previous filings that it planned to use the proceeds of the IPO to repurchase bonds due in 2016. As of the end of June, Berry sported a leverage ratio of 5.7 times its net long-term debt versus its adjusted earnings. That’s well above the average for a typical public company but in-line with other private equity backed deals, in which the buyer often borrows money to complete the deal.

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